RedBarn joins the list of a number of successful local businesses that have enjoyed property tax breaks over the years. The company’s application for a tax abatement was approved by the Barton County Commission Monday, but not before some inflammatory allegations were made during an open hearing.
The hearing began with County Financial Officer Janet Crane explaining that state law allows counties to exempt part or all of a company’s property taxes for up to 10 years as an economic development incentive.
In Barton County, that is allowed with a formula that begins with a 100 percent exemption and then that exemption reduces by 10 percent per year.
So the RedBarn exemption will run from 2011 through 2020. It will provide for a 100 percent exemption in 2011, reducing to only 10 percent for 2020, Crane explained.
During that time, she added, a total of about $208,000 in property taxes will be exempted.
There were no objections to the planned abatement from other taxing entities, and County Administrator Richard Boeckman said the school district is happy to accept the exemption because having RedBarn’s jobs here meant that USD 428 will not lose the students that were expected to be lost when Great Bend Packing closed.
However, not everyone who spoke Monday morning was as supportive.
Local resident Kristen Clark spoke during the public hearing and made serious allegations.
“I am wondering if there is some sort of back door deal” involved in bringing RedBarn to the community, she commented.
She stated that a RedBarn official purchased a private residence from Great Bend Mayor Mike Allison, then had the residence signed over to the Redbarn parent corporation, which is now trying to sell the property and she alleged that was inappropriate. “The city has basically paid for the mayor’s home.”
“It just seems fishy to me,” Clark said in her comments during the open hearing, adding that “our leaders need to be accountable” and “to not benefit” from government involvement.
County Administrator Boeckman explained the hearing and meeting Monday were dealing with the county’s involvement with RedBarn, not the city’s. “This is not a city of Great Bend tax exemption.”
RedBarn official Howard Bloxam explained the actual background of what Clark had alleged.
The California company’s purchase of the former Great Bend Packing plant was executed in January, 2010 and the company began to move about a dozen employees here to oversee the changes.
One of those early transfers was an individual who was the first plant manager. That individual, Bloxam explained, did purchase a residence from Allison, as a private purchase. It did not involve the corporation at that point.
That July — about a year ago — it was decided that there was going to be a change in manager and that individual moved back to California.
As a part of his employment package, negotiated before any of these issues were raised, was the agreement that the company would purchase the manager’s home if he moved. And to fulfill its obligations, the company did that, Bloxam explained.
For some time, the company maintained the residence for use by executives who were here from California. It has been decided, however, that the residence is too large for that use and so it is in the process of being sold. The company will, Bloxam explained, be purchasing a smaller local residence for use by its California staff when they are conducting business here.
But the allegations that were made in the public hearing are not appropriate, Bloxam explained. “It had nothing to do with the plant,” or with the more than $2 million the company has invested in changing operations from Longbeach, Calif. to Great Bend.
So far, RedBarn has created about 140 local jobs and in the next three months it expects to add more as a new production line is initiated.
And it was noted that the company is already paying more per hour here than it did for the same work when that was done in California.
It was also added that the company is looking at option for providing benefits, but it also had to make sure that it can produce a product at a competitive price.
It was also announced that RedBarn officials are seriously considering the construction of new warehouse space at the local facility.
The company has spent $2.5 million to relocate in Great Bend and incentives, such as the property tax abatement, are an important part of making that investment work.
With that amount of an investment, Bloxam stressed, it should be obvious that RedBarn plans to be involved in the community for a long time.
“We don’t plan on moving,” Bloxam said.
Now that the property tax abatement was approved by the commissioners, the issue will be forwarded to the state court of tax appeals for finalization, Boeckman explained.